TCS to roll-out wage hikes for about 80% of employees, effective Sept 1

According to an analyst, TCS provides wage hike from April 1 of every year and may have wanted to rationalise employee base before wage hike this year

Tata Consultancy Services (TCS) will increase the salaries of 80 per cent of its mid-level and lower employees starting September 2025. The news follows soon after the company confirmed the layoff of over 12,000 employees globally.

“We can confirm that we will be issuing wage hikes to around 80 per cent of our employees, effective September 1, 2025,” said TCS in a statement. Sources say these wage hikes apply to C3A and equivalent employees, meaning mid-level employees and below.

Milind Lakkad, Chief HR Officer, has said in April that TCS will defer salary hikes for employees starting April, citing growing macroeconomic uncertainty. Later, TCS announced “a number of reskilling and redeployment initiatives” as part of its journey to become a Future-Ready organisation. It had estimated these changes to impact about 2 per cent of global workforce, primarily in the middle and the senior grades.

During an interview with businessline, K Krithivasan, TCS CEO said that this was the first year in the recent past when the deferred wage hike. For some of the job grades, he had said the company will increase the quarterly variable allowance (QVA) compared to the previous quarter.

“At least, to some extent, we will compensate [employees]. For the lower grades, we have always been giving 100 per cent QVA. For the next level grades, we will increase the QVA component to compensate for the wage hike that has not been rolled out. We would like to ensure that we are able to roll the wage hike out quickly,” said Krithivasan during the interview.

According to an analyst, TCS provides wage hike from April 1 of every year and may have wanted to rationalise employee base before wage hike this year. The analyst also viewed the move as a means to protect their turf and avoid any damage to service delivery to clients since there were concerns of employees leaving the company due to the layoffs announcement.

Greyhound Research said the salary revisions for FY26 are not about retention but margin protection with internal approvals guided by delivery profitability and attrition hotspots. It noted that while TCS has been consistent with appraisal cycle in the past, likely deferred 2025 hikes pending H2 revenue recovery. The workforce discontent borne from this has prompted companies like HCL Tech and others to use bonuses and variable pay over fixed hikes as alternative offers. Unless wage strategy aligns with performance transparency, disengagement will persist, the research firm said.

Published on August 7, 2025